Advice for the Self Employed?

MadOldMaz

Hi everyone. I'm delighted to have found this forum and have read some of the threads with interest. I'm not sure I'm sensible enough to be here - but I would appreciate your thoughts.

I set up my own business just over two years ago, working as a designer from home and funded by a remortgage. The fortunes of the business have been variable but after some expensive setbacks are slowly improving. I have recently found a source of regular work, albeit providing a somewhat erratic income. I love working for myself.

I have kept the business and myself going by cashing in my endowment and by using seven credit cards (I know! I know!).

The crunch came in August when I realised that I could no longer afford either the mortgage repayments or the credit card minimum payments and that things weren't going to get better "next month".

I have sold my house ... the money should come through in the next week ... and moved into rented accommodation. I had to pay six months rent in advance (which I borrowed from a friend) because I couldn't prove I had sufficient income and I also moved before the house was sold - so that the credit check still looked good. But this resulted in further borrowing on an overdraft - to pay for the move.

I am now three months in arrears on the mortgage and on four of the credit cards (the other three cards - one of which is a business one - are up to date).

Of the four credit cards in arrears; Marks&Spencer have accepted a £5 a month arrangement (although haven't stopped the interest) and have not hassled me at all. MBNA, Capital One and Barclaycard have piled on penalty charges, over limit charges and extra interest and have been continually phoning me. They won't stop hassling me and adding charges because I can't provide an income and expenditure analysis.

I don't have any regular income. It might be £2,000 one month and nothing the next. I did a rough calculation for the six months to August and my income was greatly exceeded by my priority outgoings. I topped it up with the cashed in endowment and the credit cards.

I've spoken to the CCCS and they suggested making token monthly payments to all my credit cards and then making full and final settlement (F&FS)offers to them all, when I get the money. I won't have enough left to pay everything off - after the mortgage and arrears have been paid off and I've paid back my friend and the bank.

It was me that decided to keep three of the cards going and make token payments to the other four. It scares me to death - the thought of being without any credit cards during a month when I don't earn enough to live on. How would I buy food and fuel?

So what's the position on paying off just some of your creditors?
Can I make F&FS offers to four credit cards and keep three going?
Can I pay Marks&Spencer in full because they've treated me so much more pleasantly and make only partial offers to the others?

Is it possible to keep some of the cash - for the bad months - whilst making lower offers to all of the credit cards? I should now be able to live on my average income but need a buffer for the bad months.

Should I take the time to work out a proper income and expenditure analysis? It would take me about a week. I need to work out gross income, take off business expenses (all those receipts lying about!) and work out proportions of business use on the car, telephone etc. Even then it wouldn't be accurate until the figues go to the accountant.

I'm already really behind with my work - because of the move - and that means behind with income as well. Further delay would also really irritate my new source of regular work. I feel I really should just get my head down and earn as much as possible.

I feel completely stressed out at the moment - the house sale has been a nightmare; it's a month behind schedule - and I'm not sleeping well.

What would you do?
(And apologies for the long post!)

Sea78

Hi - not sure about this - I think the creditors won't be impressed that you're keeping up with some credit cards but not there's and therefore will not accept the token/stop interest etc.

Welcome to the board though Perhaps you could post us up a SOA?

Sea xx

MadOldMaz

Thanks for the welcome Sea.

Forgive me if I don't do a SOA immediately?
I'm waiting to see how much money I get from the house; I don't know the mortgage redemption figure yet but should hear in the next few days.

I was afraid that paying off just some of the cards wouldn't wash.

Maz